Thursday, 22 October 2015

Lord Lawson is a bloody fool

"Richard North & EUreferendum are likely to bamboozle and confuse undecideds with long winded egotistical waffle and lose us the EU Referendum." tweets a Kipper.

That's actually kipperspeak for "we'd rather just grunt about foreigners than engage in anything more complex". That said, we would be the first to admit that our writing is longwinded and it does bamboozle. It certainly bamboozles us just trying to figure it all out. But we have figured it out, and it is the job of an effective campaign to communicate what we have learned as simply as possible rather than retreating to the comfort zone of hackneyed eurosceptic memes.

We could not have been any clearer that winning the intellectual argument for Brexit is paramount and simplistic arguments are not going to reach any new ears. Winning hinges on having a credible message and ditching the traditional eurosceptic baggage. You can win over the core vote with it but the media will be looking to scrutinise our arguments closely. If it is shown that our arguments are built on a house of intellectual sand then we're going to lose hands down.

One such example of that scrutiny is Oliver Kamm in The Times today. Kamm is often wrong about a great many things but on this, he is no fool. He writes:

Economists refer to a “trilemma” in international finance. Ideally, a country would want three things in finance: stability, access to international markets and sovereignty. Yet these are incompatible. In practice, it’s possible to have two of these options, but not all three.

If we chose national sovereignty, there would be be a trade-off in reducing financial stability. Conceivably, that would be a price worth paying. Here, though, is a cautionary tale of the unanticipated consequences of regulation. Among the reasons for London’s importance as a centre for eurobonds — debt instruments denominated in a currency other than that of the country in which they’re issued — was differences in national regulations. An onerous regulation called Q introduced in the United States in the 1960s limited the interest that could be paid on time deposits. This meant that US residents had an incentive to keep dollars outside the country. The resulting demand led to the creation of a thriving business in eurodollar deposits. Borrowers and lenders welcomed the ability to trade under a lighter regulatory regime. The City has been glad of the business ever since.

That’s the best argument I can make for national sovereignty in financial services. It’s not very good. Or, rather, it might apply to a smaller financial centre that wants to specialise in particular sectors. EU regulation on alternative investments — the business of hedge funds — has had more than a hint of panic and overkill. Because hedge funds are so mobile, they might conceivably flock to London from Geneva if Britain were outside the EU.

However, a global financial centre like London doesn’t operate in the same way. If it sought to create a competitive advantage through deliberately light regulation, it would cease to have the benefit of access to cross-border finance. EU countries would argue that Britain’s financial sector was a threat to stability and so would reduce the access of British banks to their markets.

Markets that have big financial sectors relative to the rest of their economy increasingly emphasise tough regulation. If anything, the Bank of England has been tougher on regulation than is required under the Basel accords on bank capital. If Britain were outside the EU, there would be no tearing up of bank regulations. Nor should there be.

This is exactly what we have been saying. There is an obvious case for a common regulatory framework and full sovereignty is a concept that exists only in the imaginations of the uninformed. Sovereignty on such issues is an issue that plagues all the nations of the world and not just the EU states as they all struggle to reconcile the globalisation process. As an argument the case for deregulation just doesn't fly. First off are the questions of what would you deregulate and how? Those are serious questions that require serious answers that few on our side are equipped to answer convincingly. The consequences of doing so are unimaginable.

Central to winning the referendum is reassuring the public and the opinion formers that Brexit would not cause significant disruptions, which is why we have maintained we would stay in the single market and continue to abide by the rules. The real reason to leave the EU is that the rules are not made by the EU. They are the product of global conventions and to have real influence there, we need to maintain our presence at the global level. The EU demonstrates today that it has every intention of replacing member states at that level. That is what a decent campaign would be spending its efforts on communicating - however complex that may seem.

But a decent campaign is precisely what we don't have. Business For Elliot's (B4E) "Vote to Leave" campaign is making the flawed deregulation argument without the slightest clue of what that entails with no thought as to how it will be received by opinion formers. Yesterday morning on Radio 4, B4E spokesman, Lord Lawson, was making those same facile arguments without any mention of the international dynamic - and in one thoughtless brainfart managed to undo the reassurance argument. He was clearly speaking on autopilot, trotting out the same tedious and careless mantras.

As we have noted recently, the SW1 crowd have hijacked the campaign with the main ambition of making a lot of money and will do so by minimising overheads. That means expending zero effort on researching and communicating an effective campaign message - and because the kippers lack any kind of message discipline and have given no thought to their core message, they will obligingly repeat and retweet. It shows that the Brexit argument is based on anything more than a petulant whinge without a credible alternative or a plan. This has certainly not gone unnoted by The Times.

An effective campaign would have a plan and a strategy and would have briefed their key spokesmen not not make such careless arguments. But this they have not done. Kippers might then wonder why I am openly hostile to them when they bring their clueless snivelling to me on Twitter, saying we should fall into line and applaud like clapping seals to a message that most certainly will lose the referendum. The essence of their complaint about us at EUreferendum is that it's most inconsiderate of us to write things that tax their tiny brains that require a modicum of effort.

It's not very sporting of us to say that we have been badly let down by the likes of Elliot and Ukip, and our speaking outside of their comfort zone embarrasses them. What they are essentially saying is that they are happier just whinging and promoting the same tired old eurosceptic tropes. Winning is not on their agenda.

I am the first to admit that communicating our message is not going to be easy. Richard North and I speak daily, discussing how we can get this message out with a budget of zero, while being actively undermined by a campaign that does not know what it is doing - and has given no thought to strategy or message. It seems impossible now. This last week, both of us have been tempted to walk away from it completely. Christ alone knows why we haven't. I think the kippers would prefer it if we did, which is as good a reason as any not to. We will continue to hold up their mirror so they can see their own ignorance in its full glory.